- 36 -
assertion that security expenses were 96 to 97 percent business
in nature and only 3 to 4 percent personal is likewise in direct
conflict with the respective charges shown for the Foothill Drive
and 24th Street properties in the proffered invoices. Thus, what
testimony was offered concerning the proportion of security costs
attributable to the residence has proven unreliable. Nor have
petitioners suggested grounds on which any particular expenses
disallowed as potentially residential should not be subject to
the proscriptions of section 280A.
Regarding costs for security while traveling, Mr. Deihl
testified that guards secured merchandise at conventions but also
protected family members, particularly children, by acting as a
buffer between them and the distributors and by escorting them
amongst the various rooms, etc. Petitioners’ sole and entire
argument on brief addressing security is as follows: “we find
that Respondent disallowed almost $12,000 in security expense
with respect to security guards during a trip to Puerto Rico in
February of 1998 for Petitioners’ training. Petitioners
testified about the need for security during their business
trips.”
The referenced outlay is evidenced by an invoice from
Michael Reed dated February 18, 1998, showing three charges. The
first is $8,646 for 752 hours, at the stated rate of $11.50 per
hour, on 2/8/98 through 2/21/98, at the location “POST 1”. Next
Page: Previous 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 NextLast modified: May 25, 2011